True or False questions

9) 9) NOT allocating some corporate costs to divisions and products results in which of the following? A) a decrease in overall corporate profitability B) the sum of individual product profitability being greater than overall company profitability C) the sum of individual product profitability being less than overall company profitability D) an increase in overall corporate profitability 10) 10) A company sets up cost pools for indirect cost allocation. Management sees clear cause-and-effect relationships between the incurrence of costs and the chosen the cost-allocation base. What other common relationships or basis with a cost allocation base might management utilize to allocate costs? A) Capital investment in a related process B) R&D expenses C) benefits -received D) gross profit proportions 11) 11) Managers of supplier departments A) view the budgeted rates negatively if unfavorable cost variances occur due to price decreases outside of their control B) view the budgeted rates negatively if unfavorable cost variances occur due to price increases outside of their control C) view the budgeted rates negatively if favorable cost variances occur due to price decreases outside of their control D) view the budgeted rates positively if unfavorable cost variances occur due to price decreases outside of their control 12) Electro Corp sells a refrigerator and a freezer as a single package for $1130. Other data are in the chart below. 12) Selling price Manufacturing cost per unit Stand-alone product revenues Refrigerator Full-size Freezer Packaged Price $840 $490 $1130 $700 $290 $1,350,000 $970,000 Using the stand-alone method with selling price as the weight for revenue allocation, what amount will be allocated to the refrigerator? (Do not round any intermediary calculations.) A) $713.68 B) $840.00 C) $416.32 D) $565.00 13) 13) Which of the following is an example of a bundled product? A) an accounting textbook with an access code to a homework/study system B) a checking account C) A complete mechanics tool kit D) Microsoft Excel 14) 14) Under which allocation method are one-way reciprocal support services recognized? A) step-down method B) artificial cost method C) reciprocal method D) direct method